Pacific Equity Partners (PEP) is to acquire ASX-listed building services specialist Johns Lyng Group in a transaction valuing the company at approximately AUD1.1bn ($725m), marking one of Australia’s largest private equity-led public-to-private deals of the year, according to a report by Reuters.
Under the terms of the scheme, PEP-backed vehicle Sherwood Bidco will acquire all shares in Johns Lyng for AUD4.00 per share in cash, representing a 25.8% premium to the company’s last closing price. The offer has received unanimous support from the company’s independent board directors.
Shares in Johns Lyng surged as much as 23.3% following the announcement, hitting AUD3.92 – its highest level since February and positioning the stock for its best single-day performance on record. The broader S&P/ASX 200 Index remained largely unchanged at the time.
Founded over 70 years ago, Melbourne-based Johns Lyng has grown into a diversified building services platform with operations spanning Australia, New Zealand, and the US. The company has faced mounting pressure in recent months, following a sharp share price correction and disappointing earnings during the February reporting season, when it fell 31% in a single session.
The transaction structure will allow CEO and largest shareholder Scott Didier to retain an equity interest in the company through rollover participation. The board cited the strategic merits of the proposal, particularly in light of current market volatility and sector headwinds, as reasons for recommending the deal.
Despite macroeconomic challenges in the Australian housing market – including elevated living costs and subdued real estate activity – a rebound in home prices in June and speculation around rate cuts by the Reserve Bank of Australia have helped to stabilise sector sentiment.
